Question

Current Liabilities of a company are Rs. 75,000. If current ratio is 4:1 and Liquid Ratio is 1 : 1, calculate value of Current Assets, Liquid Assets and Inventory.

Answer 1

Answer:

LIQUID ASSETS=Rs.75,000

CURRENT ASSETS=Rs.3,00,000

INVENTROY=Rs.2,25,000

Answer 2

Explanation:

Solution :

Current Ratio = 4 : 1 (given)

★ Current Assets :

Current Ratio = $\dfrac{Current \: Assets}{Current \: Liabilities}$

$\dfrac{Current \: Assets}{75,000} \: = \: \dfrac{4}{1}$

Current Assets = 75,000 × 4

Current Assets = 3,00,000

___________________________

★ Liquid Assets :

Liquid Ratio = 1 : 1 (given)

Liquid Ratio = $\dfrac{Liquid \: Assets}{Current \: Liabilities}$

$\dfrac{Liquid \: Assets}{75,000} \: = \: \dfrac{1}{1}$

Liquid Assets = 75,000

___________________________

★ Inventory = Current Assets - Liquid Assets

= 3,00,000 - 75,000

= 2,25,000

Inventory = 2,25,000

Therefore,

• Current Assets = 3,00,000
• Liquid Assets = 75,000
• Inventory = 2,25,000